ASSIGNMENT 2 FRONT SHEET
Qualification

BTEC Level 4 HND Diploma in Business

Unit number and title

Unit 5: Accounting Principles (5038)

Submission date

December 5th 2023

Date Received 1st submission

Re-submission Date

Date Received 2nd submission

Student Name

Student ID

Class

Assessor name

December 5th 2023

Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that

making a false declaration is a form of malpractice.
Student’s signature
Grading grid
P3

P4

P5

P6

P7

M2

1

M3

M4

D2

D3


❒Summative Feedback:

Grade:


❒Resubmission Feedback:

Assessor Signature:

Date:

Internal Verifier’s Comments:

Signature & Date:

2


Table of Contents
Task 1: Producing Financial Statements (P3) ...................................................................... 4
Task 2 Analysing and Interpreting Financial Statements (P4) ........................................... 7
Introduction ........................................................................................................................... 7
Conclusion (P5) ..................................................................................................................... 9
Task 3: Budgets (P6) ............................................................................................................. 10
Learn about the benefits and limitations of budgeting (P7) .............................................. 12
References .............................................................................................................................. 13

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Task 1: Producing Financial Statements (P3)
Financial statements at the beginning of the period
Income statement
Revenue
Tuition fees earned


123.900

Training fees earned

40.000

Total

163.900

Expense
Depreciation expense, Professional library

0

Depreciation expense, Equipment

0

Salaries expense

50.000

Insurance expense

0

Rent expense


33.000

Teaching supplies expense

0

Advertising expense

6.000

Utilities expense

6.400

Total

95.400

RE

68.500

Equity begin

90.000

Owner investment

0


Owner withdrawal

(50.000)

RE

68.500

Equity end

108.500

4


Balance Sheet
Asset

Liabilities

Cash

34.000 Accounts payable

Accounts receivable

0 Salaries payable

Teaching supplies


8.000 Unearned training fees

Prepaid rent

3.000

Prepaid insurance

12.000

Professional library
Accumulated depreciation, professional
library

35.000

Equipment

80.000

Accumulated depreciation, equipment

(15.000)

(10.000)

Equity

Total Liabilities and
147.000 Equity


Total Asset

Transaction 1: December 15th 2022: ABC company owes its emlpoyees $7000
Accounts
Salaries Payable
Salaries Expense

DR

CR
7000

7000

Transaction 2: December 15th 2020: ABC agrees to provide training services.
Provides 30 days of service for a fee of $6000: 6000/30=$200
December 15th 2020 to December 31th 2020 is 17 days: 200*17=$3400
Accounts
Unearned Training fees
Account Payable

DR

CR
3400

3400

December 1st 2020 : ABC purchased equipment for $16,900 by cash

Accounts
Cash
Equipment

DR

CR
16,900

16,900

5

26.000
0
12.500

108.500

147.000


Calculate depreciation expense: (16,900-7,000)/36= 275
Accounts
Depreciation expense
Accumulated depreciation

DR
275


CR
275

Financial statements at the beginning of the period
Icome statement
Revenue
Tuition fees earned

123.900

Training fees earned

43.400

Total

167.300

Expense
Depreciation expense, Professional
library

0

Depreciation expense, Equipment

275

Salaries expense


57.000

Insurance expense

0

Rent expense
Teaching supplies expense

33.000
-

Advertising expense

6.000

Utilities expense

6.400

Total

102.675

Profit

64.625

Equity begin


90.000

Owner investment

0

Owner withdrawal

(50.000)

RE

64.625

Equity end

104.625

6


Balance Sheet
Asset

Liabilities

Cash

17.100 Accounts payable


Accounts receivable

3.400 Salaries payable

Teaching supplies

8.000 Unearned training fees

Prepaid rent

3.000

Prepaid insurance

12.000

Professional library
Accumulated depreciation,
professional library

35.000

Equipment
Accumulated depreciation,
equipment
Total Assets

(10.000)

Equity


26.000
7000
12.500

104.625

96.900
(15.275)
150.125 Total Liabilities and Equity

150.125

Task 2 Analysing and Interpreting Financial Statements (P4)
Introduction
FPT Digital Retail Joint Stock Company (FPT Retail) was established in 2012 in Vietnam, is a
company under FPT Group, owns 2 retail chains: FPT Shop, F.Studio By FPT and 1 company. The
subsidiary is FPT Long Chau Pharmaceutical Joint Stock Company. In 2012, Digital Retail Joint Stock
Company was established, as one of 07 companies under FPT Joint Stock Company. In 2013, FPT
Shop officially reached the milestone of 100 stores. In 2014, FPT Shop reached the milestone of 200
stores in 63 provinces and cities. Become a direct importer of genuine iPhone.
After that, in 2015 FPT Shop achieved the fastest growth compared to other affiliated companies of
FPT Joint Stock Company with revenue increasing by 50% compared to 2014, pre-tax profit increased
by 338.7%. With that success, FPT has had strong development (FPT Retail, 2023).

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Raw data
Net Sale Revenue

Gross profit
Operating profit
Net profit
Average assets
Shareholders' Equity
Current Assets
Current Liabilities
Inventory
Cost Of Goods Sold
Average Accounts
Receivable
Net Credit Purchases
Average Accounts Payable
Depreciation
Total Liabilities
Total Interest Payments

Profitability

2021
22.494.961.408.082
3.151.513.261.599,00
546.195.520.349
443.898.346.428
10.786.068.729.507
1.679.274.238.761
10.221.931.678.747
9.106.707.790.746
4.930.359.332.607
19.343.448.146.483


2022
30.165.800.756.670
4.703.177.379.257
473.967.863.770
398.074.197.408
10.523.796.935.046
2.049.335.540.169
9.326.797.408.285
8.474.374.694.877
6.483.827.665.529
25.462.623.377.413

1.985.364.755.551
16.239.806.504.638
2.335.742.934.745
585.528.444.388
9.106.794.490.746
132.229.176.761

538.346.191.905
23.909.155.044.491
2.307.356.375.016
887.338.884.656
8.474.461.394.877
231.527.904.809

2021
14,01%
2,43%

1,97%
4,12%
26,43%

Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return On Assets
Return On Equity

2022
15,59%
1,57%
1,32%
3,78%
19,42%

FPT Retail's Gross Profit Margin increased by about 1.58% compared to 2021. This is a good point
for the business. However, Operating Profit Margin in 2022 will decrease by about 0.86%. Net Profit
Margin also decreased by 0.65%. Return On Assets also decreased by 0.33% and Return On Equity
decreased by 7.01% compared to 2021. These numbers are not down much, but all three items are
down, showing that the company is having problems in its business operations. In summary, FPT
Retail's ability to generate profits in 2022 has been negatively affected.

Liquidity Ratio

2021
1,12
0,58


Current Ratio
Quick Ratio
8

2022
1,10
0,34


The current ratio decreased by 0.02 compared to 2021 and the quick ratio also decreased slightly by
about 0.25. This is not good for the company because it is having difficulty raising capital to pay
short-term debts. In summary of 2022, FPT Retail has lower debt repayment ability than 2021.

Efficiency Ratios

2021
3,92
11,33
6,95
2,09
93,03

Inventory Turnover Ratio
Accounts Receivable Turnover Ratio
Accounts Payable Turnover Ratio
Assets Turnover Ratio
Day's Sales in Invenroty

2022
3,93

56,03
10,36
2,87
92,94

Inventory Turnover Ratio in 2022 increased slightly by about 0.38 but not significantly and Day's
Sales Inventory did not change much so this is stable for FPT Retail. Accounts Receivable Turnover
Ratio increased by 394% and Accounts Payable Turnover Ratio increased by 49% in 2022, which
shows that the business's ability to collect receivables effectively and that the company can also repay
debt and manage cash flow well. Assets Turnover Ratio in 2022 also increased by about 37%
compared to 2021, proving that the company's use of assets in production and business activities is
effective and good for the company.

Solvency Ratios

2021
4,13
0,11

Interest Coverage Ratio
Solvency Ratio

2022
2,05
0,15

FPT Retail's 2022 Interest Coverage Ratio decreases by 2.08 compared to 2021. Solvency Ratio in
2022 also decreases by 0.04 compared to 2021. However, the decrease is not much so it does not have
too much negative impact on FPT Retail.
Conclusion (P5)

FPT Retail's financial situation is generally stable. Regarding Profitability, there is a decrease but not
significantly. Liquidity Ratio is also somewhat reduced. Efficiency Ratios has increased somewhat.
Finally, the Solvency Ratio decreases. The reason for the decline in financial revenue is due to
increased costs. The reason for this decline is that FPT Retail in 2022 will face disadvantages such as
supply chain disruption during the launch of new Apple products, and the purchasing power of
information technology and communications products will decrease sharply due to influence of macro
factors. Financing costs are rising due to rising interest rates and capital market concerns. However,
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net revenue grew 34% compared to 2021. Despite this, FPT Retail's financial situation in 2022 is
stable. This is good for business.

Task 3: Budgets (P6)
Income Statement Budget

Jan

Feb

Mar

Apr

May

Jun

Sale Unit


350

500

350

400

400

550

Revenue

59.500

85.000

59.500

68.000

68.000

93.500

COGS
Depcreciation

17.500


25.000

17.500

20.000

20.000

27.500

20.833
5.950

20.833
8.500

20.833
5.950

20.833
6.800

20.833
6.800

20.833
9.350

Sale Expense

R&D Expense
Interest
Expense

2.975

4.250

2.975

3.400

3.400

4.675

700,00

641,67

583,33

525,00

466,67

408,33

EBT


11.542

25.775

11.658

16.442

16.500

30.733

Tax Expense

2.308

5.155

2.332

3.288

3.300

6.147

Net Income

9.233


20.620

9.327

13.153

13.200

24.587

Jul

Aug

Sep

Oct

Nov

Dec

500

600

650

750


850

850

85.000

102.000

110.500

127.500

144.500

144.500

25.000

30.000

32.500

37.500

42.500

42.500

20.833
8.500


20.833
10.200

20.833
11.050

20.833
12.750

20.833
14.450

20.833
14.450

4.250

5.100

5.525

6.375

7.225

7.225

350,00


291,67

233,33

175,00

116,67

58,33

26.067

35.575

40.358

49.867

59.375

59.433

5.213

7.115

8.072

9.973


11.875

11.887

20.853

28.460

32.287

39.893

47.500

47.547

10


Loan Payment

Jan

Feb

Mar

Apr

May


Jun

Beginning Debt

120.000

110.000

100.000

90.000

80.000

70.000

Interest

700,00

641,67

583,33

525,00

466,67

408,33


Principal Payment

10.000

10.000

10.000

10.000

10.000

10.000

Ending Debt

110.000

100.000

90.000

80.000

70.000

60.000

Jul


Aug

Sep

Oct

Nov

Dec

60.000

50.000

40.000

30.000

20.000

10.000

350,00

291,67

233,33

175,00


116,67

58,33

10.000

10.000

10.000

10.000

10.000

10.000

50.000

40.000

30.000

20.000

10.000

0

Cash Budget


Jan

Feb

Mar

Apr

May

Jun

Beginning Cash

140.000

177.567

234.020

271.680

315.667

359.700

Total Cash inflow

59.500


85.000

59.500

68.000

68.000

93.500

Sale Expense

5.950

8.500

5.950

6.800

6.800

9.350

R&D Expense

2.975

4.250


2.975

3.400

3.400

4.675

Principal Payment

10.000

10.000

10.000

10.000

10.000

10.000

Interest

700,00

641,67

583,33


525,00

466,67

408,33

Tax Expense

2.308

5.155

2.332

3.288

3.300

6.147

Total Cash Outflow
Ending Cash
Balance

21.933

28.547

21.840


24.013

23.967

30.580

177.567

234.020

271.680

315.667

359.700

422.620

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Jul

Aug

Sep

Oct


Nov

Dec

422.620

479.307

548.600

624.220

712.447

813.280

85.000

102.000

110.500

127.500

144.500

144.500

8.500


10.200

11.050

12.750

14.450

14.450

4.250

5.100

5.525

6.375

7.225

7.225

10.000

10.000

10.000

10.000


10.000

10.000

350,00

291,67

233,33

175,00

116,67

58,33

5.213

7.115

8.072

9.973

11.875

11.887

28.313


32.707

34.880

39.273

43.667

43.620

479.307

548.600

624.220

712.447

813.280

914.160

Learn about the benefits and limitations of budgeting (P7)
Benefit: Budgets are often used to establish planning and control of key accounts within an
organization. Budgeting also has benefits that can be mentioned such as helping to compile statistics
on business income and expenditure accounts, budgeting helps organizations have a broader view of
the total amount of money available, thereby helping to balance the budget. using revenue and
expenditure accounts and using them more effectively. Using a budget list also helps predict future
risks because making a project list reports in advance whether the business's performance will be good
or not. bad situations help managers prepare plans to handle bad situations that may occur. Another

benefit is helping businesses control spending, helping businesses analyze and supplement reasonable
spending for different goals, thereby helping businesses control spending and avoid waste. In addition,
budgeting also helps businesses make better decisions (HM Hub, 2023).
Limitation: Budgeting also has limitations in that it will lack flexibility in cases of unexpected changes
from external factors such as changing market conditions and will cause loss of efficiency. Budgeting
is also based only on predictions, so budgets can be inaccurate compared to reality. In addition, when
budgets are set too high, it can also cause employees to become exhausted and tired. The final
limitation is that this is a job that requires a lot of time and effort to budget, while that resource could
be used for more important things, so this is a time-consuming job (HM Hub, 2023).
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References
FPT Retail. (2023) Giới thiệu, [ONLINE] Available from: [Accessed 22
November 2023].
HM Hub. (2023) Advantages & Disadvantages of Budgeting, [ONLINE] Available from:
[Accessed 3 December 2023].

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